19 solar, wind and biofuel stocks to watch

Commentary: Opportunities in new alternative-energy tech stocks

SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, there are lots of deals in alternative-energy technology stocks. Your research just has to dig deeper.

That’s what I discovered when I was publishing my financial newsletter years ago. So when I saw Wired magazine’s new feature, “The Clean Tech Meltdown,” I knew there had to be stocks that probably weren’t melting down, were overlooked, appealed to contrarians or were long-term investments.

We began our research with Rachel Swaby’s sidebar, “Power Struggles” on Wired, focusing on eight areas in the alternative energy sector. We were able to isolate leads to 19 specific investment opportunities:

Solar power stocks: ‘One hour sunlight can power the world for a year’

The good news: There’s enough sunlight hitting “Earth in one hour to power the world for a year,” reports Wired. But the “prices for conventional solar cells have fallen 40% in the past year, due largely to a flood of panels from Chinese manufacturers, which have benefited from plunging silicon prices and government support.”

Suntech Power

Nellis Power Plant - Nellis Air Force Base. Nevada

And yet, the opportunities are huge: “15% Return on Solar Investments Attract Buffett, KKR and Google” shouts the headline over at InvestorPlace.com. That 15% estimate comes from Stanford’s Center for Energy Policy and Finance.

Is the sun setting on the solar industry? Don’t bet on it. Bloomberg reports that U.S. solar developers are luring cash at record rates — and that investors include Warren Buffett’s Berkshire Hathaway
BRK.A, -0.35%BRK.B, -0.08%
and the innovators at Google
GOOG, -1.10%
among others.

Berkshire Hathaway together with the biggest Internet search company, the private equity company and insurers MetLife
MET, -1.92%
and John Hancock poured more than $500 million into renewable energy in the last year.

Bottom line: don’t let China and Solyndra spook you, the future of solar is here in America: Buffett MidAmerican Energy Holdings recently agreed to buy California’s Topaz Solar Farm from First Solar Inc.
FSLR, -2.23%
. And they plan to pump $2.4 billion into developing it for an estimated 16.3% return on a 25-year contract selling energy to PG&E at $150 a megawatt-hour.

And naturally they urge caution and patience: “While we were skeptical about solar stocks in the recent past because it simply takes time to absorb a 50% fall in ASP, we were always of the opinion that the future is bright for the industry.”

Wind-power stocks: ‘Enough energy for 12 times America’s needs’

Yes, Wired says wind energy can meet our total consumption needs 12 times over. But as we all know, competition’s impacting the alternative-energy arena: Wholesale electricity used to be between $45 and $85 per megawatt-hour a few years ago, “but the natural-gas boom, plus the 2008 recession, drove prices under $30 by 2009, eliminating wind’s financial edge. Also, NIMBY protests have made getting approval for a wind farm in the U.S. as difficult as getting it for a coal-fired plant.”

The good news is that the worst could be over and the wind may be at the industry’s back, so to speak, because the long-term opportunities look great. Cheaper wind turbines should “lower costs for wind power by 2014.” Growth has been slow since the 2008 meltdown; for example, the Guinness Atkinson Alternative Energy Fund
GAAEX, +0.00%
is now under $5 from $15 earlier.

But the wind sector is still predicted to meet roughly a third of America’s energy demands over the next couple decades.

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